Correlation Between Chase and Nanophase Technol
Can any of the company-specific risk be diversified away by investing in both Chase and Nanophase Technol at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chase and Nanophase Technol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chase and Nanophase Technol, you can compare the effects of market volatilities on Chase and Nanophase Technol and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chase with a short position of Nanophase Technol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase and Nanophase Technol.
Diversification Opportunities for Chase and Nanophase Technol
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chase and Nanophase is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chase and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol and Chase is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chase are associated (or correlated) with Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of Chase i.e., Chase and Nanophase Technol go up and down completely randomly.
Pair Corralation between Chase and Nanophase Technol
Considering the 90-day investment horizon Chase is expected to generate 7.35 times less return on investment than Nanophase Technol. But when comparing it to its historical volatility, Chase is 3.02 times less risky than Nanophase Technol. It trades about 0.03 of its potential returns per unit of risk. Nanophase Technol is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Nanophase Technol on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Nanophase Technol or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chase vs. Nanophase Technol
Performance |
| Timeline |
| Chase |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nanophase Technol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chase and Nanophase Technol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chase and Nanophase Technol
The main advantage of trading using opposite Chase and Nanophase Technol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase position performs unexpectedly, Nanophase Technol can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nanophase Technol will offset losses from the drop in Nanophase Technol's long position.The idea behind Chase and Nanophase Technol pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nanophase Technol vs. Iofina plc | Nanophase Technol vs. Green Star Products | Nanophase Technol vs. Greystone Logistics | Nanophase Technol vs. Crown Electrokinetics Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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